Entertainment provides a bright spot
New TV formats continue to spark furniture activity
By Larry Thomas -- Furniture Today, December 24, 2006
High Point — Amidst one of the worst industrywide sales slumps in recent memory, entertainment furniture has emerged as a winner. And furniture-makers have plasma, LCD, DLP and HDTV to thank for that.
Without these new technologies — and the sleek TV sets that make use of them — it's likely that entertainment furniture would be just another sluggish category.
"Business has been great ... but I think it's going to explode," said Karl Eulberg, vice president of sales at Kathy Ireland Home by Martin.
With flat-panel TVs flying off the shelves of retailers, how could it get much better?
It's the price (of the TV), of course. The majority of flat-panel TVs still sell for more than $1,000, which Eulberg and other executives say is out of reach for most middle-class consumers. But as prices continue to fall (some 32-inch LCD models already have dropped below that magic price point) more people will be able to afford one.
"We're not even close to the top of the (sales) curve," Eulberg said.
An obvious market
And the good news for furniture-makers is that nearly all of those flat-panel TV buyers, regardless of the price they paid, are going to quickly discover their new toy won't fit in or on their existing entertainment furniture.
That's one of the big reasons why consumer spending on entertainment furniture jumped an estimated 11.2% to just over $5 billion in 2006. It's only 6% of total consumer spending on furniture and bedding, but it's a category that's rapidly gobbling larger slices of the spending pie.
"I see nothing but positive things ahead," said Eric Shupack, president of Furnitech, an importer of entertainment consoles.
Shupack and many other executives believe sales of consoles and other credenza-like items will continue to grow much faster than the larger wall systems that once were the staples of the category. That's because flat-panel TVs, which are capable of receiving high-definition signals, are still considerably more expensive than standard TVs. Consumers, therefore, will have less money to spend on furniture once they've picked out a TV.
Plus, executives say many of today's consoles will accommodate a wide range of components and speakers, and they are designed to hide the maze of wires and cables needed to hook everything together.
"Features such as wire management and media storage add to the value of the product," said Kelly Cain, vice president and product manager at Stanley Collections.
Cain said consumers increasingly are opting to put speaker panels over storage compartment doors, since most home theater systems have three to five speakers and they want to hide them.
If they don't choose speaker panels, glass inserts are the preferred option so that components can be operated by remote control without opening the doors, he said.
A status symbol
For those who still want larger-scaled wall units, executives said doors that hide the TV when not in use are often shunned because consumers want to show off their high-tech "toy" to friends and neighbors.
"It's a status symbol," said Furnitech's Shupack. "Why would you want to hide it?"
Producers say that while sales of some types of larger units, notably living room wall systems and bedroom armoires, are falling steadily, certain niche products such as corner units are picking up a bit.
Stanley, for example, has had success with a corner unit that is part of its new Lincoln Park collection, while Hooker had similar results with Albany Park, a smaller-scaled entertainment wall that can be configured as a corner unit with two piers.
"Because the TVs are so flat, they don't require as much depth, so you don't need these gargantuan corner cabinets that take up a huge amount of space," Stanley's Cain said.
Eulberg said Martin is taking many of its cues from consumer electronics retailers, who often hear first hand what consumers want in entertainment furniture.
The challenge, he said, is to take those desired features and incorporate them into a lifestyle product that looks good in the home and enhances the electronics.
"Just about everything in the consumer electronics channel is ultra-contemporary, but not everyone wants ultra-contemporary furniture," Eulberg said.
Furnitech's Shupack, however, joked that he "couldn't get arrested with anything traditional," because consumers buying his company's consoles overwhelmingly prefer contemporary styling.
"I've actually had cases where consumers are seeking the furniture before they buy the technology," he said.
"You can't go out a buy a TV and not at least think about the furniture."
Producers acknowledge, however, that most consumers still buy the TV before purchasing furniture. That's one reason why the first quarter is typically the most brisk period of the year for entertainment furniture sales. Consumers might buy a TV as a present, but are more likely to wait until after the holidays to buy furniture, producers say.
"Home entertainment is really strong right after Christmas through the end of February," Cain said. "They want to get their TV in time to watch the Super Bowl and all the basketball games."
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